HARARE – Zimbabwean miners have urged national power utility, Zesa Holdings, to reduce its electricity tariffs in an effort to boost the country’s mineral output.
Mines minister Walter Chidakwa last week said he was lobbying for a special power tariff of $0,04 per kilowatt hour (kwh) from the current $0,06/kwh for chrome miners to reduce production costs.
“All miners, particularity ferrochrome companies, have the problem of power… we would want a good price… 40 percent of the cost of running a furnace is power so they are huge power guzzlers,” he said, adding that it would be difficult to attract smelters under the current high tariffs.
“All smelting facilities, whether you are talking about gold smelting or platinum group of metals, nickel smelting and the like, they use a lot of power and particularly ferrochrome processors,” the minister said.
This comes as most of the country’s mining companies are directly importing power from regional power suppliers on the back of unsustainable prices offered by the local power utility.
The rest of the mining sector is still lobbying for a slash in the electricity tariff, from the present $0,12/kwh to at least $0,08/kwh amid indications that miners lost between $200 000 to $5 million in output to power cuts in 2016 alone.
Chidakwa said while it would be ideal for local chrome companies to export high carbon ferrochrome — a higher grade of the metal, which requires more power to produce and fetched more on the international market — government lifted its raw chrome exports ban temporarily to allow chrome miners space to develop and invest.
“But in the meantime, to cover that gap we are allowing them to export raw chrome so that they can balance their costs and once you have sorted out the power issue, we can revert to the ban…
“A power cost of below $0,04c/kwh would be the best power for us… At the moment power for the chrome smelters is at 6,7c/kwh and it is putting a lot of pressure on the miners and you would need a very high price of the metal for you to cover such high costs of power,” he said.
This year, Zimbabwe is planning to export over 800 000 tonnes of chrome following the country’s move to re-distribute ground previously held by chrome miners.
Information gathered by businessdaily, however, reveals that Zesa is unwilling to play ball claiming that would make it difficult for it to pay for power imports.
The power utility has indicated that it is spending $5 million per week on power imports from South Africa and Mozambique to augment locally-generated electricity.
Zimbabwe is currently generating 888MW against a national demand 1400MW, implying that the difference would be met through imports, and in some cases load shedding.
In the third quarter of 2016, the Zimbabwe Power Company (ZPC) — an investment vehicle in electricity generation — sent out 1 758, 24 GWh against a target of 1 935 10 GWh, missing its target by 9,14 percent.
ZPC said it missed the target due to a number of factors “including cash flow challenges” and forced outages at Hwange because of tube leaks and ID fan challenges.
Load shedding is gradually hitting domestic consumers after a long period of uninterrupted power supply stretching back to Christmas last year.